The Africa Centre for Energy Policy (ACEP) has criticised the Ghanaian government’s decision not to renew the mining lease of Abosso Goldfields Limited (AGL) at Damang, describing it as unlawful and premature.
The government, through the Ministry of Lands and Natural Resources, has announced a takeover of the mine today, 18th April 2025.
Reacting to the government’s decision during a press conference in Accra yesterday to express disagreement, the Executive Director of ACEP, Mr. Benjamin Boakye, emphasised that government’s approach should reflect diligence, legal compliance, and a genuine commitment to Ghana’s long-term mineral wealth.
“When remedies are provided in the law, the hearts and minds of the implementers cannot be at variance with the prescribed remedies,” he pointed out.
Mr. Boakye described the action as a rushed one and a disputed decision which would not only risk international litigation and reputational damage, but also undermine investor confidence and the rule of law.
He stated that though ACEP agrees that government deserves to benefit fully from its mineral resources, he was of the view that any stakeholder that truly aligns with this national goal must be transparent and factual in demonstrating how their decisions maximise public benefit.
“Government needs to exercise restraint, renew dialogue, and pursue a legally guided resolution that protects the interest of both the state and investors,” he stressed.
Touching on the undercurrents for the rejection, he mentioned that industry enthusiasts may be aware that in recent years, AGL has been exploring options, including a divestiture of the Damang mine, as it indicated in its 2024 report that the reserve does not meet its conservative Mineral Reserve Economic Criteria (MREC), explaining that it does not mean there is no gold reserve in the mines as being interpreted.
“The MREC is just a decision tool which turns to be based on changing economic variables around operations of the mine. Therefore, the state and its agencies cannot pretend not to understand this economic decision tool in the industry,” he said.
According to him, news portals have already captured state officials and also implied the minister’s statement that this is all in an effort to nationalise the mine.
The ACEP boss also expressed the view that if government wants to revisit the 1970s policy resource nationalisation efforts, which collapsed the mining industry, then it needs to be clarified by the government on what will be different this time to leave no doubts in the minds of investors, especially when the required actions per the law are clear but the actions of implementers differ.
Touching on the reasons cited by government to reject the renewal, such as the company’s refusal to declare its mineral reserves, absence of technical programme and the lack of the company’s budgetary allocations for exploring, he said they are all matters known by the Minerals Commission so it does not justify grounds for the decision.
“As a responsible policy think-tank, ACEP has seen similar cases where public officials are convinced that their decisions were in the interest of the state but were proven wrong.
“Consequently, these decisions have escalated into costly outcomes for the state. Examples of such include the attempted novation of the Ameri Power contract, the Agyapa royalty transaction, the GPGC power contract and the GNPC’s attempted acquisition of the Aker Deep Water Tano/Cape Three Points (DWT/CTP) which was later acquired by AFC for $1) among many others”, the ACEP boss cited.
Abosso Goldfields Limited (AGL) is a Ghanaian gold mining company that owns and operates the Damang Gold Mine. AGL is a joint venture, with Gold Fields Ghana Holdings Limited holding 71.1% and Gold holding 18.9%.
The company focuses on extracting gold from various types of mineralisation, including oxide and fresh hydrothermal mineralisation, and many more.
Source:https://energynewsafrica.com
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